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Citation Information

Type Journal Article - IZA Journal of Labor & Development
Title Minimum wage violations in Honduras
Author(s)
Volume 4
Issue 1
Publication (Day/Month/Year) 2015
Page numbers 1-19
URL https://www.researchgate.net/profile/Andres_Ham/publication/281842899_Minimum_Wage_Violations_in_Hon​duras/links/55fad7b408ae07629e075637.pdf
Abstract
This article studies minimum wage non-compliance in Honduras, a dual labor market
with high wage floors that are weakly enforced. However, rather than just counting
how many workers earn sub-minimum wages, I also estimate violation indices
that measure compliance at the intensive margin. I first explore cross-sectional heterogeneity
in violations using household survey data. Then, I quantify compliance
adjustments to minimum wage hikes by comparing indices before and after a large
unexpected increase. Results show substantial differences in non-compliance across
industries, location, and coverage status. Violations worsen with rising minima, but
less in in more compliant sectors.

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